Gamesindustry.biz reports that the UK developer Argonaut has been hit today by the cancellation of publishing deals for two key titles, Malice and Orchid, while poor retail performance of Kung Fu Chaos has prevented the commissioning of a sequel.

In a trading update issued to the City this morning, the development group revealed that Vivendi Universal Games has decided not to publish Malice and has returned all rights to Argonaut. The game - touted as one of the most impressive on the Xbox prior to the launch of the console - was recently delayed again by a gameplay redesign.

A second blow comes with the cancellation of Argonaut's original title Orchid, which was to be published by Namco Hometek. According to the developer, after discussions with Namco the two companies "have concluded that the potential returns on this title do not justify the additional investment required to complete the game" - resulting in an outright termination of development on the product.